India: Emerging as a Leading Economy Amid Global Changes

As global power competitions become more intense and traditional partnerships weaken, billionaire investor Ray Dalio asserts that the world has entered a crucial stage where technology, self-sufficiency, and national strength are more significant than agreements or rhetoric. In an extensive dialogue with entrepreneur Nikhil Kamath, the founder of Bridgewater Associates conveyed that India, despite facing its own set of challenges, is in a unique position to become one of the fastest-growing major economies over the next decade.

Shifting from Multilateralism to Power Politics

Dalio’s positive outlook on India is framed within what he describes as a transforming global order, which is increasingly characterised by competitions for power rather than collaborative efforts, particularly between the United States and China.

According to Dalio, the post-1945 global structure that centred around institutions like the United Nations, World Trade Organisation, and World Bank is essentially a thing of the past. This has been supplanted by a system where power, rather than established rules, determines outcomes.

He observed that the current environment lacks the stable world order that previously existed, pointing to increasing geopolitical fragmentation and diminishing trust among major powers. Countries are now preparing for conflicts that extend beyond military confrontations, affecting trade relationships, financial capital flows, technology usage, and spheres of influence.

Dalio remarked that we are witnessing the traditional forms of conflict that precede military action. He stated that we are currently in a trade war, a technology war, and a geopolitical influence war. While he does not foresee an immediate slide into large-scale military conflict, he cautioned that the risks are higher than in previous decades, especially when domestic vulnerabilities interplay with external pressures.

Technology as the Key Battleground

Identifying the technology war as the most pivotal contest shaping future global leadership, Dalio asserted that leadership in advanced technologies—ranging from semiconductors to artificial intelligence—will ultimately dictate economic greatness, military effectiveness, and geopolitical sway.

While the United States holds a leading edge in advanced chip innovation, Dalio noted that China has demonstrated a remarkable capability to implement technology across various sectors, seamlessly integrating AI and digital infrastructures into daily governance and production practices.

This competitive dynamic, according to Dalio, compels nations to reevaluate their vulnerabilities. He observed that countries are now striving for independence and are keen to reduce interdependence.

He pointed out that nations are increasingly assessing their dependencies—particularly in capital, supply chains, and technology—that could be leveraged by competitors, and they are taking steps to mitigate those risks.

India’s Distinct Opportunities

In this turbulent landscape, Dalio perceives India entering a promising phase of development. Utilizing proprietary leading indicators to predict long-term economic growth, he stated that India ranks highest among major economies for the upcoming decade. He expressed that India boasts the optimal fundamentals for achieving the best growth rate.

Dalio attributes this optimistic outlook to factors such as low debt levels, substantial talent pools, and improving infrastructure. Unlike many heavily indebted advanced economies, India retains considerable capacity to expand credit, enhance both physical and digital infrastructures, and formalise economic activities—all contributing to potential impressive growth trajectories.

He explained that building infrastructure and facilitating credit transactions create opportunities for growth. He compares India’s current situation to where China was approximately thirty years ago—at the inception of its transformation, but with a strong momentum supporting its progression.

The Importance of Domestic Strength

For Dalio, the central element in this new world order hinges on a country’s domestic health rather than on managing alliances. He emphasised that the overall health of a nation is paramount, stating that if a country is robust internally, it will be strong externally as well.

In his perspective, this strength is reliant on fiscal discipline, social solidarity, technological advancedness, and the capability to navigate internal political dynamics—challenges that every significant power, including India, must manage with care.

Nonetheless, Dalio remains clear in his assessment: as the global landscape transitions from open globalisation to cautious rivalry, India’s fundamental characteristics present an exceptional opportunity for substantial growth at scale. He indicated that for these reasons, India holds the potential to achieve the highest growth rates and advancements in the coming decade.